FPS Labs is reporting that
NVIDIA will soon announce
its intention to acquire AGEIA. FPS Labs' Stu Grubbs has
no financial terms for the deal, but notes that his confidential
source expects the deal to become official sometime this week.

AMD batted
around the idea of purchasing AGEIA in November 2007, but
considering that the company is still recovering from its ATI
acquisition, that idea was put to rest rather quickly. It should be
interesting to see how AMD will respond to the news if the
announcement comes this week -- especially considering that AMD has
already declared
GPU-based physics dead.

If NVIDIA has its way, NVIDIA GPUs and
chipsets may have an even closer synergy with AGEIA hardware in the
future.

Updated 2/4/2008
Just moments after this story went live, NVIDIA sent us the official PR announcing its acquisition of AGEIA (further details will come forth on Wednesday):

NVIDIA, the world leader in visual computing technologies and the inventor of the GPU, today announced that it has signed a definitive agreement to acquire AGEIA Technologies, Inc., the industry leader in gaming physics technology. AGEIA's PhysX software is widely adopted with more than 140 PhysX-based games shipping or in development on Sony Playstation3, Microsoft XBOX 360, Nintendo Wii and Gaming PCs. AGEIA physics software is pervasive with over 10,000 registered and active users of the PhysX SDK.

“The AGEIA team is world class, and is passionate about the same thing we are—creating the most amazing and captivating game experiences,” stated Jen-Hsun Huang, president and CEO of NVIDIA. “By combining the teams that created the world’s most pervasive GPU and physics engine brands, we can now bring GeForce®-accelerated PhysX to hundreds of millions of gamers around the world.”

“NVIDIA is the perfect fit for us. They have the world’s best parallel computing technology and are the thought leaders in GPUs and gaming. We are united by a common culture based on a passion for innovating and driving the consumer experience,” said Manju Hegde, co-founder and CEO of AGEIA.